Residential Property, the 30-day window to pay Capital Gains Tax (CGT) from 6 April 2020

Residential Property, the 30-day window to pay Capital Gains Tax (CGT) from 6 April 2020

The Government has passed legislation which will have a major impact on the reporting and payment obligations of UK resident taxpayers (individuals and trusts), who dispose of UK residential property from 6 April 2020.

From 6 April 2020, a UK resident individual or trust who disposes of UK residential property will be required to file a stand-alone CGT return within 30 days of the completion of the disposal if they are not covered by an exception.

The seller will need to estimate the CGT due on the disposal and pay it to HM Revenue & Customs within 30 days from completion. The amount paid will reduce the tax liability when the calculation is finalised, for example when the tax return is submitted.  If additional CGT is payable then late payment interest will be charged on the amount underpaid.

Most disposals will not be subject to the 30-day reporting and payment deadline. In particular, where a gain is covered by private residence relief, the CGT annual exemption, when the property is sold at a loss or if the property is situated outside of the UK.

If you do not report the disposal and pay any CGT due within 30 days of completion, you may be charged late filing and late payment penalties as well as having to pay interest on any tax outstanding.

Please contact us in the event of a planned sale. This will allow us to gather relevant information and advise you about the potential tax payable.

If you have any queries or would like to discuss any of the points in more detail, please do not hesitate to contact either Sandy Gaywood on 01633 653150 or your usual Kilsby Williams contact.